Definition of Consumer Behavior

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Definition of Consumer Behavior

• Individuals or groups acquiring, using and
  disposing of products, services, ideas, or
  experiences
• Includes search for information and actual
  purchase
• Includes an understanding of consumer thoughts,
  feelings, and actions

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Acquisition, Consumption and Disposal

• Acquisition
• Receiving
• Finding
• Inheriting
• Producing
• purchasing

• Consumption
• Collecting
• Nurturing
• Cleaning
• Preparing
• Displaying
• Storing
• Wearing
• Sharing

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Acquisition, Consumption, Disposal

• Disposal
• Giving
• Throwing away
• Recycling
• depleting

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Contributing Disciplines

• Anthropology
• Sociology
• Psychology
• Economics
• History
• Political Science

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Reasons for Studying Consumer Behavior

• To stay in business by attracting and retaining
  customers
• To benefit from understanding consumer problems
• To establish competitive advantage
• because it is interesting!

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The Circle of Consumption

• Production
• Acquisition
• Consumption
• Disposal

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The Circle of Consumption, continued

• Typically, attention of marketers has focused on
  acquisition as the critical phase
• Only recently has more attention been given to
  include the full circle and the links between its
  elements
• Disposal to acquisition
• Disposal to production
• Disposal to consumption
• Production to consumption
• Acquisition to consumption
• Acquisition to disposal

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Consumer Research

• The systematic and objective process of
  gathering, recording, and analyzing data for aid
  in understanding and predicting consumer
  thoughts, feelings, and behaviors.
• In a global environment, research has become
  truly international.

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Important Factors in Consumer Research

• Speed
• The Internet
• Globalization
• Data Overload

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Types of Consumer Research

• Basic Research
• To expand knowledge about consumers in general
• Applied Research
• When a decision must be made about a real-life
  problem

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The Consumer Research Process

• Defining the Problem and Project Scope
• The Research Approach
• The Research Design
• Data Collection
• Data Analysis and Interpretation
• Report

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Marketing Management Philosophies

• Production Concept
• Product Concept
• Selling Concept
• Marketing Concept
• Societal Marketing Concept
• Green Marketing
• Cause-Related Marketing
• De-Marketing

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Production Concept

• Focus on Production
• View of consumers
• They will buy as long as the product is available
  and affordable.
• Model T You can have any color as long as its
  black.
• Focus on production justified
• Demand higher than supply
• Non-competitive product cost

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Product Concept

• Focus on the product
• View of consumers
• We have to have the best quality and the most
  features and they will buy.
• Consumers might not care about quality
• Consumers might not be willing to pay for the
  best quality
• Consumers might not be able to discern quality
  difference
• Consumers might prefer simplicity

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Selling Concept

• Focus on selling
• View of consumers
• We have to sell to them or else they wont buy.
• Focus on selling justified
• Introductory stages of product life cycle
• Unsought goods

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Marketing Concept

• Focus on marketing
• Creating mutually rewarding exchange
  relationships
• Consumer needs and wants have priority
• View of consumers
• They will buy if you fulfill their needs better
  than the competition.

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Societal Marketing Concept

• Same as Marketing Concept plus an added concern
  for the well-being of society

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Market ResearchResearch Designs

• Exploratory Research
• Descriptive Research
• Causal Research

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Exploratory Research

• Literature Research
• Experience Survey
• Focus Groups
• In-Depth Interviews

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Exploratory Research

• Insights and Ideas
• Precision Specific Hypotheses
• Establishment of Priorities
• Increase of Familiarity with Problem
• Clarification of Concepts

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Descriptive Research

• Description of Characteristics of a Certain Group
• Estimation of the Proportion of People in a
  Specified Population who Behave in a Certain Way
• Specific Predictions

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Descriptive Research

• Longitudinal Studies
• True Panel
• Omnibus Panel
• Cross-Sectional Analysis
• Field Study
• Sample Survey

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True Panel Advantages

• Brand Switching Analysis
• Collecting Classification Information
• Compensation for Participation/Time
• Accuracy
• Reduced Interaction Bias

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True Panel Disadvantages

• Non-Representativity
• Drop-out Rate
• Payment

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Causal Research

• Laboratory Experiments
• Field Experiments
• Internal and External Validity

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Market Segmentation Bases

• Demographic
• Geographic
• Geo-Demographic
• Benefit
• Usage
• Lifestyle

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Market SegmentationAdvantages

• Specific Definition of the Market
• Satisfaction of Consumer Needs
• Meeting Changing Market Demands
• Assessment of Competitive Strengths and
  Weaknesses
• Efficient Allocation of Marketing Resources
• Precise Setting of Marketing Objectives

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Haley, 1968Toothpaste Market

• Sensory Segment
• Worrier Segment
• Sociable Segment
• Independent Segment

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Applications of Benefit Segmentation

• Positioning
• Repositioning
• Competitive positioning
• New market opportunities/niches
• Positioning of multiple brands

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Usage Segmentation

• Rate of Usage
• Brand Loyalty
• Usage Situation

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Lifestyle SegmentationPsychographics

• Activities
• Interests
• Opinions
• Demographics
• VALS I and II
• Maslows Hierarchy of Needs

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Consumer Decision MakingTypes of Decisions

• Extensive Problem Solving
• Limited Problem Solving
• Routinized Response Behavior

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Problem RecognitionCauses in Current State

• Depletion of Stock
• Dissatisfaction
• Decrease in Finances
• Increase in Finances

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Problem RecognitionCauses in Desired State

• New Need Circumstances
• New Want Circumstances
• New Product Opportunities
• Purchase of Other Products

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Information Searchand Evaluation

• Incidental Learning

• Directed Search and Evaluation
• Internal only
• loyalty
• impulse
• Internal and External

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Purchasing Process

• When to buy?
• Where to buy?
• How to pay?
• How much to buy?

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Post-purchase Behavior

• Cognitive Dissonance
• Satisfaction/Dissatisfaction

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Motivation

• Definition
• Categories of Needs
• Arousal of Motives
• Motive Structuring
• Motive Conflict
• Motivation Theories

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Motivation Theories

• Freud
• Lewin
• Maslow

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Freudian Theory

• Basic Principles
• Homeostasis
• Hedonism
• The Structure of Personality
• Id
• Ego
• Super-ego

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Projective Techniques

• Word Association
• Sentence Completion
• Cartoon Test
• Thematic Apperception Test (TAT)
• Rorschach Test (inkblots)

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Lewins Field Theory

• Life Space
• Person
• Environment
• Formula
• Conflict
• Approach-Approach
• Avoidance-Avoidance
• Approach-Avoidance

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Perception

• Definition
• Threshold Levels
• The Perceptual Process
• Selection
• Organization
• Interpretation

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Selection

• Internal Factor
• Attitudes
• Expectations
• Motives
• Attention Span
• Perceptual Defense
• Perceptual Vigilance
• Adaptation
• Perceptual Blocking

• External Factors
• Color
• Contrast
• Size
• Position
• Intensity/Magnitude
• Movement
• Humor
• Fear

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Organization

• Closure
• Figure and Ground

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Interpretation

• Physical Appearance
• Stereotypes
• Irrelevant Cues
• First Impressions
• Jumping to Conclusions
• Halo Effect

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Learning

• Definition
• Learning Theories
• Marketing Applications

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Learning Theories

• Behavioral Learning Theories
• Classical Conditioning
• Instrumental Conditioning
• Cognitive Learning Theories
• Consumer Information Processing
• The Structure of the Memory
• Memory Processes

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Marketing Applications

• Classical Conditioning
• Creating Associations
• Stimulus Generalization
• Family Branding
• Product Line Extensions
• Licensing
• Look Alike Packaging

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Marketing Applications

• Instrumental Conditioning
• Rewards
• Reinforcement Schedules/Advertising
• Intermittent
• Continuous

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Involvement

• High Involvement Hierarchy of Effects
• Cognition
• Attitude
• Behavior

• Low Involvement Hierarchy of Effects
• Cognition
• Behavior
• Attitude

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Communication

• The Nature of Communication
• Communication Model
• Sender
• Message
• Receiver
• Psychological Noise

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Sender

• Source Credibility
• Trustworthiness
• Expertise
• Status
• Other Dimensions
• The Sleeper Effect

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The Sleeper Effect

• Consumer forget the source of the message faster
  than the message itself.
• Over time, high-credibility sources lose power to
  change attitudes.
• Over time, low-credibility sources gain power to
  change attitudes.
• High-credibility sources need to reinstate
  message.
• Low-credibility sources should not reinstate
  message.

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Message

• Size, Color, Position
• Order of Presentation
• Humor
• Agony Advertising
• Content
• Fear Appeals (moderate!)
• Audience Participation

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Order of Presentation

• Climax order
• Anticlimax order
• Pyramidal order
• What works best, depends on consumer involvement.

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Receiver

• Selective Attention
• Selective Perception
• Selective Appeal

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Cultural Dynamics

• Definition of Culture
• Cultural Sensitivity
• Culture and its Elements
• Material Culture
• Social Institutions
• Humans and the Universe
• Aesthetics
• Language

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Culture Defined

• The sum total of knowledge, beliefs, art, morals,
  laws, customs, and any other capabilities and
  habits required by humans as members of society.
• The distinctive way of life of a group of people,
  their complete design for living, a mosaic of
  human life.

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Subculture

• Definition
• Types of Subcultures
• Selected Subcultures
• Acculturation
• the Learning of another Culture/Subculture

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Types of Subcultures

• Nationality
• Religion
• Region
• Ethnicity
• Age
• Gender
• and many more.

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Stages of Acculturation

• Honeymoon
• Rejection
• Tolerance
• Integration

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Social Groups

• Definition
• Types of Groups
• Group Properties

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Types of Groups

• Primary and secondary
• Formal and informal
• Membership and symbolic
• In and out

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Group Properties

• Status
• Roles
• Norms (Sanctions)
• Power
• Socialization

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Power

• Reward
• Coercive
• Legitimate
• Referent
• Expert

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Reference Groups

• Influence on product category choice
• Influence on brand choice
• Factors
• Luxuries vs. necessities
• Publicly vs. privately consumed
• Visibility